Taxation

Creation of a VAT group: you can opt until 31 October

Publié le 17 octobre 2025 - Directorate of Legal and Administrative Information (Prime Minister)

Do you want to create a VAT group for 2026? To subscribe to this plan, members of the group must apply to the tax department to which they depend before October 31, 2025.

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What is a VAT group?

A VAT group is the possibility offered to different closely related entities financial, economic and organizational of become a single taxable person for VAT purposes. It concerns persons liable to VAT who have their business or permanent establishment in France or, failing that, their domicile or habitual residence.

This grouping of legal persons allows:

  • non-taxation of VAT on transactions between members of the group;
  • the optimization of the cash flow of the group entities;
  • the simplification of VAT reporting obligations.

FYI  

From 2026, the remuneration paid by the employer member of a VAT group will be exempt from payroll tax under two conditions:

  • the employer would not be subject to the payroll tax if it were not a member of that VAT group;
  • the turnover of the transactions carried out by the VAT group, which give rise to the right to deduct, is at least equal to 90 % of the total amount of its turnover taxable for VAT purposes. This is the turnover for the calendar year preceding the year in which the remuneration was paid.

Option to be reported before 31 October 2025

To form a VAT group, the option must be formulated by declaration before 31 October of the year preceding its application. This declaration shall be made by the representative designated by the group to the tax office concerned. It is accompanied by the agreement of all members. The VAT group is then trained at 1er January for a minimum period of 3 years.

It has a unique VAT identification number.

The criterion of links between taxable persons in the VAT group

Members of a VAT group must have financial, economic and organizational links in order for the group to be set up. These links must continue during the group's lifetime.

These links are as follows:

  • financial links: direct or indirect ownership of more than 50 % of the capital or voting rights of another taxable person ;
  • economic links: carrying on a principal activity of the same nature, of activities which are interdependent, complementary or pursue a common economic objective, an activity carried out in whole or in part for the benefit of the other members;
  • organizational links: links between taxable persons in law or in fact, directly or indirectly, by a common direction or organization of their activities in full or in part in consultation.

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